ANALYSIS: Chinese investment to impact aged care: alliance

By Hsieh Wen-hua / Staff reporter

Allowing Chinese investment in the nation’s small care facilities would enable Chinese businesses to profiteer from Taiwan’s social welfare, which is a big concern, an alliance representing the welfare of seniors said.

Taiwan Home Service Strategic Alliance and Yunlin County Senior Citizen Welfare and Protection Association director of operations Lin Chin-li (林金立) said that 10 years ago, the government sought to legalize existing private care homes under two acts, the Senior Citizens’ Welfare Act (老人福利法) and the People with Disabilities Rights Protection Act (身心障礙者權益保障法), and a “three noes principle.”

Lin said according to the principle, there are no government subsidies, no external fund-raising and no tax privileges, with small facilities allowed to provide service items commissioned by the government, such as elderly housing, transportation, meal deliveries and domestic help.

However, if Chinese investors are allowed to set up facilities according to the “three noes” principle, market monopolization would likely happen because of strong Chinese financial backing, Lin said.

He added that investments by Chinese businesspeople and Taiwan’s life insurance industry in care facilities would have strong repercussions for the nation’s long-term care industry and social welfare policies.

Lin said that according to the law, to ensure people receive quality care, nonprofit organizations cannot earn a profit from chargeable services and donations must account for at least 60 percent of their income — with the remainder being tax-exempt, but not to be distributed as supplementary wages.

In addition, he said current laws stipulate that small private facilities are considered to be businesses established by individuals, so the facilities are taxed under the individual consolidated income regime.

Lin said that the domain regulated by the cross-strait service trade agreement is classed as investment “between companies,” so related laws must be amended to conform to the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (台灣地區與大陸地區人民關係條例).

This demonstrates, Lin said, the government’s promise that the service trade agreement will not lead to law changes is an impossible one to keep.

“Once the laws are amended to allow companies to manage small facilities, we will face the question of why large facilities are not allowed to make a profit, which will lead to the opening of the entire social welfare industry. The rules protecting the public will then disappear,” he said.

National Taiwan University social services professor Lin Wan-i (林萬億) said the US and Japan have learned painful lessons from opening the sector up to for-profit investment, including bribery, corruption, exploitation, filtering cases, violation of privacy and human rights, exclusion in employment, market monopoly and the sacrifice of vulnerable groups.

Taiwan Association for Disability Rights director Liu Yu-chi (劉于濟) said if Chinese-invested care facilities increase charges for services, then the poor will not be able to afford their services.

Pan Yu-kang (潘于岡), a parent of a child suffering from a rare disorder, said social welfare services that care for vulnerable groups should not be made for-profit because the quality of their care would diminish.

The Awakening Foundation said that if Chinese investment initiated pricing competition, a desire to cut costs could result in the following negative effects: Salaries and therefore numbers of care-givers might decrease; foreign workers might be forced to work extra hours; elderly people’s mobility may be restricted to make them more manageable; elderly people who require more care might be turned away; and poorer quality food might be used.